11.27.06 | Parent Plus Loans? Who needs them and Why”¦
Parent Plus Loans are federal loans that are taken out by the parent on behalf of their son or daughter when the financial aid they are recieving just isn’t enough. Although your son or daughter may be 18 and considered an adult in your eyes, the Department of Education (DOE) considers them a dependent up until the age of 24, leaving you the parent responsible for picking up the leftover.
It isn’t as bad as it sounds”¦ Like your childs federal loans your interest rate is fixed (8.5% current) by the Federal Government so you don’t have to worry about getting a high interest rate if your credit is not so hot. Although it is credit based, it is a lot more lenient on the requirements than taking out a private loan. Another perk is that even if you are denied, your child will get awarded money. Really. All he or she has to do is take that denial letter to the schools financial aid office and they will possibly be awarded more money on their Stafford Loan. It is really a win/win situation. Below I have listed some useful websites where you can get more information and apply if you are interested. I have also listed a few points worth reading.
- 8.5% interest rate
- Loan Pd. over a ten year period
- Remains in the parents name for the life of the loan
- Parents can consolidate Loans at Federal Rates